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First Sentier launches ESG-led listed infra fund in Australia

The launch of the open-ended fund to Australian investors follows a strong run for the strategy in the UK and Europe.

First Sentier Investors has launched its Responsible Listed Infrastructure Fund to Australian investors, following increased client demand for ESG-led investments.

Speaking to affiliate title Infrastructure Investor, portfolio manager Rebecca Myatt said the decision to launch the fund in Australia – which will invest globally in listed infrastructure companies aligned with the United Nation’s Sustainable Development Goals – comes after the 2017 launch of the strategy to investors in the UK and Europe.

The launch of the European iteration of the vehicle was in response to clients’ specific demand for a listed infrastructure strategy with upweighted ESG. It has so far raised approximately $70 million, with more than $60 million invested to date.

The open-ended Australian vehicle will be open to institutional and wholesale investors. Focusing on the utilities, transport, communications and energy sectors, the fund aims to exceed the FTSE Global Core Infrastructure 50/50 Index net total returns over rolling five-year periods.

“We’re really optimistic in terms of the level of growth that this strategy can have. For lots of investors, a three-year track record is needed before they’ll think of deploying capital, which is why it was important for us to get that three-year track record in Europe before we took it to other markets,” Myatt said.

“We’ve now looked at other markets to see where there’s that kind of demand for products that can help clients meet net zero [emissions], clients [who want] funds very focused on responsible investment and [are keen to use it] as a lens through which they invest.

“[We had] the idea to roll out the strategy [in Australia] because we’re seeing that there’s demand for this kind of product in the Australian market… The discussion on ESG has really taken off in the last 12 to 18 months, globally. When we started the product [in Europe] it wasn’t as mainstream as it’s becoming today.”

According to Myatt, the latest global warming report from the Intergovernmental Panel on Climate Change and recent climate-related disasters have heightened the need to achieve net zero carbon emissions as a matter of urgency. Fund managers and investors can have a hand in ensuring targets are met, she added.

“We are seeing, globally, this realisation that we are in a climate emergency… [and] whilst countries set the framework, we really need companies to drive [the push to reach net zero]. And asset management has a role to play in achieving this,” Myatt said.

“There’s this level of investors today that want both a financial return and a quantitative meaningful impact return. And that’s what we’re trying to deliver.”